New York bans FanDuel and DraftKings

[DOUGHBOYS]

Look Greg, I know the genie is out of the bottle. We can't just wish him to go back in the bottle after 35 years of fantasy being ok with politicians. These two companies brought the politicians into the picture. We are paying the price for that.

[Roger Dorn]

Yeah, it looks like a good safe haven for now involving season-long games, but its legality wasn't in question for the last 35 years and shouldn't be now.
I admire DK and FD for standing up to this guy.

I find it hard to admire anything these two companies do when they are responsible for the legality being questioned in the first place.

That's fine Dan, but if you really think this AG is doing this to protect the citizens of New York, that he's doing this because people have asked for this, if he's doing this because there's no political gain for HIMSELF, then you're kidding yourself. Sometimes bad political decisions need to be challenged and I'm calling this a grandstanding political decision fueled by lobbyists on the GAMBLING side. He's not afraid of gambling in the state of New York, he's PROTECTING gambling in the state of New York.

Here's the misconception: States are fighting DFS right now because they are afraid that the growth of DFS is going to cut into tax revenues generated from state lotteries. There is so much revenue being generated from lotteries -- which prey on the poor in a pure chance offering (no skill) -- that states must fight off competition for this money. Unfortunately, what the uneducated AGs don't understand is that the fantasy player is NOT the lottery player. That player scratches off a card or has a computer pick their numbers for a chance of winning. Fantasy players use insight and analytical data to set their lineups and want as little chance involved as possible. These are two entirely different demographics.

They are also protecting their casinos (in Nevada) and Indian casinos in other states. Again, the DFS player is not leaving casinos for DFS. This is not the slot machine person, this is more the poker player. And don't worry, if a good DFS player wants to double down on poker in your casino he will. He's not leaving one for the other. It's idiotic to think that DFS has impacted Las Vegas casinos in the negative at all.

So again, it's cool to not admire DK or FD because they brought this on themselves. But it's okay to admire the idea that they are fighting a grandstanding AG who isn't doing what's best for his state residents. Other states are working with regulators to safeguard consumers and yet still offer these games. There are MANY ways to protect consumers and make DFS a better game (ensure prizes in escrow, eliminate scripting, limit # of entries per person, etc.). Instead, he sent out Cease & Desist letters and now is sure to be in the news during appeals for the next 6 months or more. That's B.S. and I'm glad both companies called him on it.

Part of their marketing message is any Joe A**hole can win.

[TOXIC ASSETS]

Yeah, it looks like a good safe haven for now involving season-long games, but its legality wasn't in question for the last 35 years and shouldn't be now.
I admire DK and FD for standing up to this guy.

I find it hard to admire anything these two companies do when they are responsible for the legality being questioned in the first place.

That's fine Dan, but if you really think this AG is doing this to protect the citizens of New York, that he's doing this because people have asked for this, if he's doing this because there's no political gain for HIMSELF, then you're kidding yourself. Sometimes bad political decisions need to be challenged and I'm calling this a grandstanding political decision fueled by lobbyists on the GAMBLING side. He's not afraid of gambling in the state of New York, he's PROTECTING gambling in the state of New York.

Here's the misconception: States are fighting DFS right now because they are afraid that the growth of DFS is going to cut into tax revenues generated from state lotteries. There is so much revenue being generated from lotteries -- which prey on the poor in a pure chance offering (no skill) -- that states must fight off competition for this money. Unfortunately, what the uneducated AGs don't understand is that the fantasy player is NOT the lottery player. That player scratches off a card or has a computer pick their numbers for a chance of winning. Fantasy players use insight and analytical data to set their lineups and want as little chance involved as possible. These are two entirely different demographics.

They are also protecting their casinos (in Nevada) and Indian casinos in other states. Again, the DFS player is not leaving casinos for DFS. This is not the slot machine person, this is more the poker player. And don't worry, if a good DFS player wants to double down on poker in your casino he will. He's not leaving one for the other. It's idiotic to think that DFS has impacted Las Vegas casinos in the negative at all.

So again, it's cool to not admire DK or FD because they brought this on themselves. But it's okay to admire the idea that they are fighting a grandstanding AG who isn't doing what's best for his state residents. Other states are working with regulators to safeguard consumers and yet still offer these games. There are MANY ways to protect consumers and make DFS a better game (ensure prizes in escrow, eliminate scripting, limit # of entries per person, etc.). Instead, he sent out Cease & Desist letters and now is sure to be in the news during appeals for the next 6 months or more. That's B.S. and I'm glad both companies called him on it.

Exactly. Great write up.

[Greg Ambrosius]

This was my "First Take" on the New York situation during our STATS Fantasy Advantage show last night:

This is obviously another watershed moment for the industry because this is happening in the state that has the most DFS players. Nigel Eccles, CEO of Fanduel, said today on a conference call that they have over 600,000 players from New York, which is 10% of their customer base. So they aren’t backing down by this ruling, nor should they.

New York is known for its consumer protection laws, so a lot of people think this is a watershed moment AGAINST the industry. They think other state AGs will quickly follow suit and we’ll have a lot of states saying the same thing, that DFS is gambling and they need to shut down immediately.

But I think it’s a watershed moment FOR the industry. I think this is where consumers stand up and say NO MORE and the support follows nationwide. I mean, here you have an Attorney General telling two companies that are adding tax revenue to the state, adding sponsorship deals to 8 pro teams in New York, creating a contest that more than a half million residents have been playing for five years without any such legal interpretation -- where was he during the baseball season or last football season to say this is an illegal game? -- and now he tells them to go away because he thinks they are running a gambling scam on sports fans. It’s a power play. And he’s doing this without any congressional hearings or input from anyone else? It’s politics over common sense, plain and simple, and citizens should stand up to it.

Listen, New York congressman Chris Collins said it perfectly yesterday. I’m quoting, “New York’s Attorney General once again proved that he is singularly focused on grabbing newspaper headlines. In this draconian decision, Schneiderman is unilaterally denying hundreds of thousands of New Yorkers that use Fanduel and Draft Kings the ability to compete in this game of skill. Instead of looking to score political points, the Attorney General should be working with federal and state lawmakers to ensure laws are being followed. Instead, he’s opting for a two minute drill. Let’s all take a timeout from government overreach and make sure we get it right.”

That’s the approach we need. We need to stop overreaching state by state and get this done right on a federal level. Listen, we are all for regulation that ensures prizes, ensures fair competition, ensures skill based games, ensures fair payouts, ensures that taxes are being paid on winnings, ensures fair competition and more. A bill in Illinois is doing just that. It’s the model that should be followed nationwide. Why isn't anyone talking about that bill? Where's the discussion on a bill with mainly consumer protection guidelines instead of taxes? We can make this a regulated, growing industry that is safe for consumers. This is a good, growing industry that Americans seem to enjoy. Let it grow.

[Greg Ambrosius]

I don't know if anyone heard the Nigel Eccles interview on SiriusXM Fantasy Sports Radio yesterday or not, but twice he said that season long is just as threatened as daily with these laws. I know he's trying to make the point, like the FSTA lawyer was making, that we all should feel threatened by these laws and I get it. But it doesn't help to keep tying season-long in with every ruling, especially in New York where there was a clear distinction of the two formats by the Attorney General.

It's an uncomfortable position that these companies are putting the ENTIRE industry in and it definitely scares me.

[Baseball Furies]

I don't know if anyone heard the Nigel Eccles interview on SiriusXM Fantasy Sports Radio yesterday or not, but twice he said that season long is just as threatened as daily with these laws. I know he's trying to make the point, like the FSTA lawyer was making, that we all should feel threatened by these laws and I get it. But it doesn't help to keep tying season-long in with every ruling, especially in New York where there was a clear distinction of the two formats by the Attorney General.

It's an uncomfortable position that these companies are putting the ENTIRE industry in and it definitely scares me.

I heard the interview, and I was disgusted with it. All Eccles gives a shit about, like all the other big shots in the DFS space right now, is the almighty dollar. Let's stop kidding ourselves. It's all about greed for them...not the game, not the competition, not the love of the sports involved, not how great the players are, etc. It's about MONEY. Period. This is yet another reason among many that you shouldn't be getting into bed with these guys. Now more than ever the NFBC should be distancing itself from DFS and maintaining it's distinct and unique status as a different game that it has enjoyed since its inception. The DFS mentality of "well, if you're going to attack us, attack them too" (and we'll all go down together), is just bullshit. So don't be scared, stand up for what is right and get the hell away form these guys.

[BK METS]

Anyone who plays both daily and year long know there is a distinction. The good thing about the New York ruling was the separation and I think this is the way most states will proceed. Of course the DFS guys are going to lump all fantasy together, claiming government is taking all the fun away. But I think New York was a good sign for season long, no matter what the DFS higher ups might say. I agree that we should distance ourselves from DFS.

[King of Queens]

I agree that we should distance ourselves from DFS.

Many season-long customers have been saying this for more than a month. I have yet to hear from one who thinks otherwise.

[KJ Duke]

I see CA has a bill now, which does not seem to make a distinction. It would require license and of course fees for our "protection". As a consumer, I would like protections from regulators more than any business.

http://www.nbcsandiego.com/news/sports/ ... 61292.html

[Gekko]

The California legislation is for "fantasy sports games of ANY duration". DFS and season-long at risk

I see the original date was from February though.

[BK METS]

With payment processors such as vantiv demanding DK and FD to no longer accept New York customers, I think this might cause a quick end to DFS in New York, and won't survive a court battle. These payment processors are the key to operating.

[TOXIC ASSETS]

With payment processors such as vantiv demanding DK and FD to no longer accept New York customers, I think this might cause a quick end to DFS in New York, and won't survive a court battle. These payment processors are the key to operating.
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Alan I was just going to post the same item.
I have WFAN at work as I usually do and that item was just discussed.
This is really getting interesting.

[Gekko]

Hey Ken. We may need to meet up to discuss all of this. My only concern is driving home after having a bunch of beers

[Greg Ambrosius]

With payment processors such as vantiv demanding DK and FD to no longer accept New York customers, I think this might cause a quick end to DFS in New York, and won't survive a court battle. These payment processors are the key to operating.

Just my two cents, but I highly doubt DK and FD quit ahead of a court battle. This is going to the finish line whether they are operating in New York during that time or not. Too much money at stake here boys. Way too much money at stake here.

[Greg Ambrosius]

More common sense from the Massachusetts Attorney General:

http://www.bostonmagazine.com/news/blog ... -gambling/

In short, this is a good quote from her:

"I think anybody looking at this acknowledges it’s a form of gambling. Just because it’s gambling doesn’t make it illegal. We play the stock market. There are all different ways in which gambling may happen. But you know we can debate chance versus skill, and the like. I think just as a pragmatic matter, I think it’s important to get beyond that. Let’s focus on the issues, let’s focus on protecting consumers, and let’s set out some really robust standards for how this industry should operate, if it’s going to operate here in this state,” said Healey, according to MassLive.

Healey pushed back against a possible shutdown of the online gambling sites, demonstrating the level of restraint shown by politicians who do not want to gain a reputation for crushing parts of the innovation economy in their infancy: “What I’ve said is that I’m not going to use a several hundred year old criminal statute that was written at a time when this kind of industry was never envisioned. I’d like to get beyond that and figure out for policy makers and lawmakers, what should be the rules of the road.”

[Donacion]

I had my radio on flipping around the AM dial and stumbled across Sean Hannity blasting New York for the DFS overreach. Apparently he is a DFS player.

[Greg Ambrosius]

I had my radio on flipping around the AM dial and stumbled across Sean Hannity blasting New York for the DFS overreach. Apparently he is a DFS player.

I don't know if that's good or bad for us that Sean Hannity is on our side!!

I'm trolling all of the articles today and enjoying the reads. Here's a few more for ya:

http://www.nydailynews.com/opinion/harr ... sc=c6SS6jX

Here's a Tweet from @asanifisher on the New York Attorney General, who appears to have an ulterior motive in this move: "Last year alone Schneiderman took in $48,750 in campaign contributions from gambling and casino companies."

[Gekko]

Don't let the New York AG take away your right to play fantasy sports! Make your voice heard and join us at the #FantasyForAll rally!

At 8:00 AM ET FRIDAY, bring yourself and your friends, family and colleagues downtown to AG Schneiderman’s NYC office. Meet outside the entrance at 120 Broadway between Pine and Cedar.

https://www.facebook.com/events/1101328653213161/

[TOXIC ASSETS]

Hey Ken. We may need to meet up to discuss all of this. My only concern is driving home after having a bunch of beers

Mark - sounds good. I'll give you a call in the near future.

[Greg Ambrosius]

Is our friendly New York Attorney General making this ruling to PROTECT New York residents or is he doing this to protect his special interest groups? There's a clue to that answer in this fantastic Forbes story:

http://www.forbes.com/sites/darrenheitn ... orts-money

A daily fantasy sports company not named DraftKings or FanDuel has called out the New York State Attorney General. Andrew Busa, Founder and CEO of FantasyHub, says that New York Attorney General Eric Schneiderman has improperly targeted the daily fantasy industry while turning a blind eye to gambling and casino companies that line his pockets.

In an email titled, “An aggressive response against New York’s actions on DFS,” Busa writes, “Last year alone Eric Schneiderman took in $48,750 in campaign contributions from gambling and casinos companies; this doesn’t include $37,250 from Cantor Fitzgerald, one of the largest private partnerships on Wall Street, and in the past decade moved in to many industries including gambling. Cantor Gaming controls over 30% of the Nevada sports wagering market. Where is their cease and desist?”

Busa relied on a Wall Street Journal article from January 8, 2014 for the position that Cantor Gaming controls more than 30% of Nevada’s sports-wagering market.

New York follows Nevada as the most recent state to take the position that daily fantasy sports operations constitute illegal gambling . Whereas Nevada has a mechanism for sites like FanDuel and DraftKings to apply for gaming licenses and be deemed legal if registered, no such option exists for daily fantasy sports websites in the State of New York, where sports betting remains illegal under the Professional and Amateur Sports Protection Act of 1992.

Currently, no daily fantasy sports operators have applied for a gambling license in the State of Nevada, which is believed to be due to a fear that it will be used against them as a tacit admission to engaging in gambling operations.
Recommended by Forbes

While it has not been expressly stated as such by the Nevada Gaming Control Board, it is likely true that casino licensees were influential in the adoption of a licensing mechanism for daily fantasy sports operations, thereby deeming them to be providing gambling opportunities to players. Busa believes that New York Attorney General Schneiderman may also be influenced by those casino-related interests that have provided campaign contributions to him in the past and may wish for daily fantasy sports to remain outside of the state.

“Casino Gambling Expert Steve Bourie reported in 2014 that while Eric Schneiderman has been AG since 2011, ‘All New York racinos, are using bait and switch tactics on their video poker customers by not clearly explaining that the games they offer are not based on skill. Unlike slot machines, where no skill is involved, video poker games in almost all U.S. gaming jurisdictions are based on skill.’ Where was their cease and desist?,” asks Busa.

Additionally, Busa states, “To a third party, it is interesting an Attorney General, in a state where he doesn’t oversee the Gaming Commission, would happen to take in campaign donations from casinos. Those contributions which only occurred in 2014 and not in 2011, what changed?”

Busa did not have to make his position on the New York Attorney General public, as DraftKings and FanDuel are the only daily fantasy sports companies that have thus far received cease and desist demands. However, his position is that the Attorney General’s office did not just call out DraftKings and FanDuel, but the entire industry. Busa also notes that FantasyHub will continue to operate in New York, but does not provide pay-for-prize services to residents of Arizona, Iowa, Montana, Nevada, Louisiana and Washington.

“In my opinion, when an event occurs out of the blue, without a ton of evidence, there is typically something else in play,” added Busa. ”The AG, likely, didn’t consult the New York Gaming Commission when he made his decision. There is one data point; about 1% of DraftKings winners win a vast majority of the money. That report comes from Sports Business Journal. Did he talk to any other companies?”

“AG Eric didn’t ask FantasyHub what percent of users win a large portion of the money. If he did, I would have told him 10x more users win on FantasyHub than on DraftKings, when comparing to the SBJ report,” says Busa. “I can only ask, why not? Why Daily Fantasy to use your powers to make change? Who are the victims? where is the harm for what we do?”

Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.

[Gekko]

FanDuel and Draft Kings respond with lawsuits. FanDuel makes the following claim:

"In many respects, the short duration of FanDuel’s contests allows for a greater exercise of skill, and involves less chance, than contests that play out over a full season, because the participant has more available information (from team and player matchups to injury status and weather) into the factors that may affect the performance of the rostered player in particular games. By contrast, in season-long fantasy, similar information is unavailable at the time of player selection."

I realize FanDuel is fighting for their lives; however unfairly throwing season-long contests under the bus like this is a sure fire way to "activate" season-long players into speaking out about FanDuel's bullshit claims. Hopefully the AG's Office does their due diligence and contacts "season-long experts" to build their knowledge-base of season long contests. Maybe a season-long expert or two will anonymously "spills the beans" on DFS dirty little secrets, starting with last year's Reds/Coors game cancellation and how it impacted FanDuel's $3,000,000 event.

[King of Queens]

GAME OVER for New York:

Hello New York FanDuel Fans,

As you have no doubt seen, earlier this week the New York Attorney General sent us a cease and desist letter regarding play on FanDuel contests from New York. We want to take this opportunity to update you all on the situation – and make you aware of some changes that are going into effect.

FanDuel is one of the largest tech startups in New York, employs hundreds of people in this state, and has been a source of entertainment for all of you over the last five years. We are honored to have helped build this community of fantasy players and will exhaust all legal options in our pursuit to continue to be a part of your lives.

As such, it is with great disappointment that we will begin the process of limiting access to users located in New York while we pursue the opportunity to be heard in Court.

For now that means the following:

– The full slate of this weekend’s contests across all sports will run as scheduled.

– However, we will stop allowing new deposits on the site, from New York, as of today.

– All users in New York can and will be able to continue to withdraw their money as always.

The situation is developing and we will continue to keep you all updated on any changes, while we pursue our day in court.

=============================================

If banks and PayPal refuse to allow deposits on these sites, it's over for everyone.

Meanwhile, there are still 49 spots left in this week's NFFC FanDuel contest.

[DOUGHBOYS]

FanDuel and Draft Kings respond with lawsuits. FanDuel makes the following claim:

"In many respects, the short duration of FanDuel’s contests allows for a greater exercise of skill, and involves less chance, than contests that play out over a full season, because the participant has more available information (from team and player matchups to injury status and weather) into the factors that may affect the performance of the rostered player in particular games. By contrast, in season-long fantasy, similar information is unavailable at the time of player selection."

I realize FanDuel is fighting for their lives; however unfairly throwing season-long contests under the bus like this is a sure fire way to "activate" season-long players into speaking out about FanDuel's bullshit claims. Hopefully the AG's Office does their due diligence and contacts "season-long experts" to build their knowledge-base of season long contests. Maybe a season-long expert or two will anonymously "spills the beans" on DFS dirty little secrets, starting with last year's Reds/Coors game cancellation and how it impacted FanDuel's $3,000,000 event.

I said I wouldn't say anything more about this crap, but I guess my dander is up.
DraftKings and FanDuel have good strategy. They are trying to manipulate politicians into thinking that fantasy sports is all under one umbrella. Their thinking being that politicians won't shut down the WHOLE industry.
They can and will. They are a most uninformed group. And their reactions are not to solve any problem, but to either make it go away or siphon money from it.

I have a hard time blaming these politicians though. For 35 years, we went about our business with hardly any backlash.
DraftKings and FanDuel changed that.
They took an empty cauldron and put it to boil.
They put ESPN money, pro leagues money, flood advertising, and now, our industry into that pot.
The pot had a bad reaction, is boiling over, and politicians want to fix it.

From our perspective, we just want them to turn down the heat. This would give everything in the pot a time to settle and go back to normal, knowing not to make the same mistakes again.
Even setting standards to guard against such a thing.
But, we're afraid.
Afraid, that the politicians just want to get rid of the whole cauldren and be done with it.

[Greg Ambrosius]

This fight in New York is FAR from over Glenn. It should scare every American that one person has that much power to just eliminate an entire industry in his state in a blink of an eye. He must be a hero to the right wingers of our country.

There's something called due process and I think it will play out here. I have no idea how it will finish, but I certainly think the courts will decide if he overreached to protect his special interests or if he really saved Gotham.

As for us still working with a legal company (in dwindling states), we aren't abandoning this partnership just yet. I don't know how many times I can say this: We believe in the DFS model and what it brings to the industry. The game itself has merit, whether Draft Kings runs it or Fanduel runs it or STATS runs it. The entire pay-to-play fantasy sports model is in jeopardy right now, not just DFS. New Yorkers are just as threatened to be excluded from season-long as DFS. What happened this week should be scary to all of us. In fact, you have no idea how scary.

If me ending the NFFC/Fanduel Weekly Contest would solve all of this, I'd do it. But it won't and now New Yorkers can't even play that going forward.

[Greg Ambrosius]

Dan, I agree. But again, you folks better realize how crazy this is all getting and poking fun at me for a weekly DFS game isn't going to solve this. You now have lawyers at every company looking at what Nevada, New York and others are saying and taking it as gospel for any pay-to-play fantasy game. The New York AG didn't do anyone any favors, even with his "this game is legal and this one isn't" analogy. In fact, that's what has EVERYONE in the same boiling pot now.

Las Vegas is dead to fantasy now. Everyone is running scared.

Never in my wildest dreams would I have seen this coming. And sure we can blame DK and FD, but again from my perspective I'm seeing politics rule the day over sanity. And some people think that's okay. I just don't get it.